Many of us dream of retiring…..almost, daily right!?!? We can all imagine those days fishing, hanging out with your kids/grand kids and traveling. But doing any and all of those things requires cash and lots of it. If you’re not sure where to start, don’t worry.
First off, your not alone. Here are seven GUARANTEED steps that you can take to maximize your retirement now so that you have enough later.
1. How to Catch Up On Retirement Savings
What if you find yourself in an unfortunate predicament when it comes to your retirement savings? That is to say, you may be 50 or 60 years old and realize you have little if nothing saved up for your retirement. You need to start your CATCH-UP NOW!
However, according to a CNN Money report, all is not lost. There are steps you can take to make up for the difference before you retire. First, you need to save more than you already are now. If you save 15% now, push that number up to 20% to 25% to increase your savings. Second, don’t retire early. A couple more years on the job or even working an extra shift or two a week can add up over the long haul.
Finally, the CNN article suggests that you get creative. Can you downsize? What about searching the best places in the US to retire where the cost of living is less? You have plenty of options. It’s okay to take advantage of them. There are tons of options were you tailor your portfolio to your lifestyle.
2. Free Financial Tools
You don’t keep your grocery list in your head. Why try to keep your financial information there? Plenty of free or inexpensive financial tools exist that will help you keep track of your finances. The U.S. News and World Report suggests a few tools that most of us are familiar with that when used are highly effective.
Why not follow Dave Ramsey’s advice and keep a series of envelopes? You know how much you owe each month for each bill. Why not give each bill an envelope? Tuck the money in there once you earn it. Pay the bill when the time comes.
From a technology perspective, Personal Capital allows you to track, plan and follow right from a phone application. If you prefer to use your computer, there’s an online interface. Otherwise, download the app and use on your phone. I admit, when I started using Personal Capital myself it was just important that the app was easy to use and mobile friendly. Let me assure you, the app gets over 4 Stars on each mobile platform.
Create a FREE account with Personal Capital Services To Get Started
3. Retirement Calculator
You can’t reach a goal if you don’t know what it is. If you don’t know how much you need to retire, then how you can you plan for that? That’s where a retirement calculator comes in handy. You may need to save a bunch of money each year to reach your retirement goals, but then again, maybe you won’t. You won’t know what that magic retirement number is, until you look at the numbers in a retirement calculator.
What you get from the Retirement Planning Calculator:
● Set your retirement goals and track your progress over time
● Enjoy free, easy-to-use tool that automatically pulls financial data from your Personal Capital dashboard
● Scenario plan – Planning for college? Saving for a new home? Use Retirement Planner to map out how much money you’ll need to meet your goals
● Adjust your retirement plan for life milestones and financial events (inheritance, a wedding, rental income, vacations, and more)
● Evaluate your saving, investing, and spending habits today affect your retirement, seeing the impact of everything from a home remodel to a new car purchase
● Calculate the monthly spending you can afford in retirement
● Take advantage of a data-driven retirement plan built on Monte Carlo analysis and robust modeling tools to see the most and least likely financial outcomes
● Check out the Recommendations page, which will help you get back on track to reaching your retirement goals
Sign-up for FREE Access to the Retirement Planning Calculator.
4. How Much Do you Need?
One of the hardest financial questions you will ever face is figuring out how much money you will need in order to enjoy a comfortable retirement. While coming up with an appropriate answer can be a bit of a challenge, there are some general guidelines that you can use to help you refine your answer.
How much you’ll need to retire is based on a few factors. How much money do you have saved up now? When do you want to retire? How long is the life expectancy in your family? These and other questions need to be answered before you know how much you’ll need.
Here’s an example: If you and your spouse will bring home $3,500 per month ($42,000 per year) from Social Security and you will need $60,000 per year to cover your anticipated expenses, you’ll need to generate $18,000 per year from your retirement savings. According to the 4% rule, you’d need $450,000 in retirement savings to generate that much sustainable income (4% of $450,000 is $18,000).
So take the time to determine how much your retirement will cost and how much income you can expect from pensions and Social Security. Using the 4% rule, you can then determine how much you’ll need to have saved up in order to enjoy a comfortable retirement.
As you can see, there are many variables to figuring out the right number. But in reality, we all save as much as we can and need to know and understand our minimum retirement amount.
5. Strategies to Maximize Retirement
Often the best way to make the most of your retirement savings is to use more than one savings and investment strategy in tandem. That’s how you can maximize your retirement accounts. An article in Forbes suggests a couple of things you can do.
First, lower your taxes. The more money you can pay to you instead of to Uncle Sam, the more money you have to go toward your retirement. Second, plan for inflation. One of the big concerns that people have is running out of money once they retire. Inflation will be a big cause of that.
You need to save enough to overcome that challenge. Third, have a savings and investing plan. Again, if this is something that feels overwhelming, ask a Personal Capital Services rep to help.
6. Define Your Retirement
Defining your retirement goes hand-in-hand with planning your retirement. How do you see yourself spending your golden years? Do you want to hang out with your grandchildren? Spend time tailgating at your favorite college team’s home games? Travel the world?
Each of these goals has a different savings requirement. You’ll need to define what that is before you set your savings plan in motion.
7. Retire Rich
Do you know how to retire rich? There are a couple of things you need to do if this is your goal. Yahoo Finance has a couple of suggestions to help you. Make sure that you spend less than you earn, and what you don’t spend, save. As a caveat to that, you ought to think about starting to save early on in your adult life. The power of compound interest will help you.
Finally, if you have access to free money, take it. What do we mean by free money? Well, if you have an employer-sponsored IRA that matches a portion of your income, take it. You’re going to work those hours anyway.
You might as well make a return on that investment. Again, if you’re not sure how to do this, talk to a Personal Capital Services rep to create a game plan.
Final Thoughts on Maximizing Your Retirement
Planning for your retirement is a bit like planning for a marathon. You don’t run all 26 miles at once. And you don’t save all the money you need for retirement at once. It’s a long-term deal.
Part of that involves spending less than you earn and socking away the rest. Part of it involves figuring out what kind of lifestyle you want to have after you stop working.
Finally, it’s okay for you to ask for help. A Personal Capital Services rep can help you get your money situation squared away long before the retirement clock starts.
Are you interested in financial freedom? What other questions do you have for me on how rid yourself of debt?
If you are interested in learning how how to get out of debt, I created a FREE 10 Days to Financial Freedom eCourse tutorial that will help you get out of debt.